Everyone is familiar with some form of insurance coverage, such as, insurance coverage on your car, your life, medical/dental insurance, or fire insurance on your home. But what exactly is "title" insurance?

title insurance is information on the status of title to real property before the purchase of mortgage of real property and protection against adverse claims that may affect the title. Title insurance shifts the risk of most title defects from the owner or lender to a title insurance underwriter.

But, unlike other types of insurance which protect the insured against loss due to unexpected future events, title insurance protects against loss which may occur due to events that took place in the past. Specifically, title insurance protects the buyer against loss resulting from previously unreported land title defects insured against, such as forgeries, claims by missing heirs, recording errors, etc.

Title insurance takes the risk out of acquiring property whose legal history is unknown. While there should be no risks when transferring property, they do exist.

There are two forms of title insurance

1. Owner's Policy - Protects the property owner against loss resulting from defects in title.
2. Mortage Policy - Insures that the lender has a valid lien on the property.